USSR and foreign policy: perestroika begins at home

January 28, 1988

By Milan Svec

IN a recent interview, Soviet leader Mikhail Gorbachev made it abundantly clear that his reforms offer the current generation of Russians the last chance to modernize their country. ``If we take fright and stop the process we have begun, it would have the most serious consequences, because we simply could not raise our people to such a massive task a second time,'' he said. Understanding the gravity of this problem, however, will not make perestroika easier or its failure less likely. To succeed, the Soviet leader has to intensify his efforts in two main directions: He must define his reforms in much bolder and much more realistic terms than has been the case thus far, and he must overcome fierce opposition to his plans on the right and the left. It will be anything but easy. The less realistically his reforms are defined, the greater the likelihood of their failure. The bolder and more pragmatic they become, the greater will be the resistance of powerful opponents against them.

The present situation is closer to the first scenario. As of Jan. 1, 60 percent of all industrial enterprises in the Soviet Union came under a new law of self-financing that threatens bankruptcy to unprofitable losers. Yet, just a few weeks ago the Soviet government newspaper Izvestia complained that the concept of restructuring was fairly clear to just one-fifth of branch directors in enterprises, while only about the same modest number regarded restructuring of management as a sufficiently thought-out problem ready for practical testing.

Some high-level Soviet officials have, meanwhile, admitted that many enterprises already transferred to self-financing last year have been working worse than those still operating in the old system.

Aware of these and other problems in the Soviet Union, Mr. Gorbachev displays increasing readiness to use foreign policy as a tool for accomplishing important domestic goals.

Soviet Foreign Minister Eduard Shevardnadze provided an interesting analysis along these lines in his speech to Foreign Ministry officials a few months ago. It was recently published in the Foreign Ministry digest Vestnik, and is very important for a better understanding of present Soviet behavior.

Mr. Shevardnadze warned his colleagues that ``very crucial and difficult times are beginning for all of us.'' He urged the whole diplomatic apparatus not to lose sight for a minute of the national economic interests of the USSR, and constantly remember instead that ``the most important function'' of Soviet foreign policy is ``to create the optimal conditions for the economic and social development of our country.''

To achieve that, Moscow now recognizes the need to ``become a more organic part of the world economic system,'' especially since - as Shevardnadze noted - ``no one is forcing us to reject the cornerstone principles of our politics.''

Moscow would obviously prefer to reinvigorate its declining economy simply by improving cooperation with its communist allies. Whatever hopes Soviet leaders might have entertained in this respect, however, are gone by now. Shevardnadze admitted as much himself. While some time has already passed since the incorporation of new reforms in the communist countries' Council of Mutual Economic Assistance, one can speak ``only of the most modest of positive changes so far,'' he said.

In fact, Soviet allies have much greater potential to be a constant drain on the Soviet economy than its saviors do. Shevardnadze bluntly warned that Moscow would have none of this anymore. ``It is in no way necessary to proceed from the fact that relations with friends must be of a loss-producing nature,'' he said.

No wonder that in these circumstances, ``a harmonious system of large-scale, long-term collaboration'' with Western countries is what the Kremlin desires most. It was very pleased, therefore, that more than 250 proposals on joint ventures with Soviet enterprises have already been received from companies in the United States, West Germany, Japan, Britain, France, and other countries.

Soviet embassies abroad are being ``called upon to play the role of forward patrol that follows everything new in the realm of scientific and technical progress, everything that could be of interest to the national economy.'' At the Foreign Ministry, a special research coordinating council is being formed, headed directly by the foreign minister.

Operating under growing domestic pressures, Gorbachev's foreign policy is constantly gaining speed. In his New Year's greetings to the American people, the Soviet leader expressed his desire not only to sign a treaty with President Reagan limiting strategic arms by 50 percent in the first half of this year, but also to address ``without delay'' the problem of cutting back ``drastically'' conventional forces and arms in Europe.

About the same time, in an interview for a Chinese newspaper, Liowang, Gorbachev suggested that a Soviet-Chinese summit be arranged as a ``logical development'' in improving relations between the two countries.

Early this month Shevardnadze publicly declared that Moscow hopes to remove its troops from Afghanistan by the end of this year without making withdrawal conditional on the composition of a transitional government there.

Gorbachev is right to expect that successful foreign policy would help him domestically. Yet, the success or failure of perestroika would depend more on his ability to break the back of an ineffective system at home and create a more effective one than on the speed and scope of his international pursuits. Thinking otherwise could be a costly mistake.

Milan Svec is a senior associate at the Carnegie Endowment for International Peace.

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